Questioning the Use of Structure To Interpret Statutory Intent: A Critique of Utility Air Regulatory Group v. EPA

In late 2009 and
early 2010, the Environmental Protection Agency promulgated a series of final
agency actions that operate together to regulate greenhouse gas (GHG) emissions
under the Clean Air Act (CAA). Under some CAA programs, sources of pollution
are required to obtain permits based on the volume of pollutants they emit.1 GHGs, however, are emitted at much greater
volumes than conventional air pollutants.2 Together, these facts led to a problem:
regulating GHG emissions at the levels apparently required by the CAA would
have increased the number of permitted sources at least a hundredfold.3 The EPA responded to this problem with the
“Tailoring Rule,” which adjusted the statutory permitting thresholds set out in
the CAA.4

In Utility Air Regulatory Group v.
Environmental Protection Agency, the Supreme Court struck down the EPA’s
regulatory solution. Nonetheless, UARG
is a significant victory for the EPA—both because the Court recognized
the Agency’s authority to regulate GHGs in the first place, and because it
ultimately allowed the EPA to regulate ninety-seven percent5 of the GHG emissions the Agency had proposed
to control under the EPA’s Tailoring Rule. To obtain this result, however, the
Court took an approach that has some troubling implications. In UARG,the Court held that GHG emissions cannot trigger certain permitting
requirements because GHGs are not properly considered “air pollutants” in the
context of some CAA programs. The Court’s analysis focused on congressional
intent, even though Congress itself did not expressly contemplate GHG
regulation when it passed the CAA. In trying to determine what Congress
intended in an unanticipated factual setting, the Court created an interpretive
precedent that is not meaningfully constrained. This Essay analyzes that
precedent and its implications. First, I discuss the meaning of the term “air
pollutant,” as used in the CAA and as interpreted by the EPA and the Court’s
previous jurisprudence.6 Next, I critique the Court’s use of FDA v. Brown & Williamson Tobacco Corp.
to justify its reinterpretation of “air pollutant” in UARG.7 Finally, I argue that in imposing this
reinterpretation on the EPA, the Court overstepped the boundaries of its role.

I. statutory and regulatory background

The CAA does not
expressly list GHGs as pollutants. In fact, in Massachusetts v. EPA, the Supreme Court recognized that the CAA’s
drafters “might not have appreciated the possibility that burning fossil fuels
could lead to global warming.”8 The CAA drafters did, however, recognize that
without regulatory flexibility of the kind necessary to subsume GHGs under the
term “air pollutant,” changing circumstances “would soon render the Clean Air
Act obsolete.”9 In Massachusetts v. EPA, the Court
concluded that the CAA should be interpreted with this need for flexibility in
mind.10 Accordingly, the Court read the statutory
definition of the term “air pollutant” broadly, and held that EPA has CAA
authority to regulate GHG emissions.11

GHGs were regulated
as CAA pollutants for the first time on January 2, 2011, when the EPA first
required controls of GHG emissions from motor vehicles.12 In the EPA’s view, this regulation triggered
additional requirements under the Prevention of Significant Deterioration (PSD)
and Title V permitting provisions. Under the PSD provisions, for example,
sources must obtain permits if they emit “any air pollutant” in specified
amounts.13 For more than three decades, the EPA has
consistently interpreted the term “any air pollutant,” as used in the PSD
setting, to mean “any air pollutant regulated
under the Clean Air Act.”14 Therefore, if the Agency chose to regulate
GHG emissions under any part of the CAA—a choice within its authority,
according to Massachusetts v. EPA—it
would be forced to impose PSD and Title V permitting requirements on thousands
of historically unregulated sources, even though a relative handful of these
sources account for the lion’s share of total GHG emissions.15

The EPA recognized
that implementing PSD and Title V permit requirements for all of the sources
meeting the statutory thresholds would “overwhelm[ ] the resources of
permitting authorities, and severely impair[ ] the functioning of the program[
].”16 As a result, it promulgated the Tailoring
Rule, which established a process to phase in the permitting requirements over
a period of time, focusing initially on the largest GHG emitters.17 The EPA set an initial regulatory threshold
of 75,000 or 100,000 tons per year of GHGs, a significant increase over the
relevant statutory thresholds of 100 or 250 tons per year.18

In UARG, the Supreme Court rejected the Tailoring Rule and disposed of
the triggering problem differently. The Court held that EPA’s long-standing
interpretation of the scope of its PSD permitting authority was incorrect. Congress,
the Court found, did not intend for PSD or Title V permitting requirements to
come into play whenever the Agency regulated a substance under any CAA program. Instead, the term “air
pollutant” was intended by Congress to have different meanings in different CAA
settings.19 In light of the Court’s holding, PSD and
Title V permitting requirements cannot currently be triggered, in the first
instance, by GHG emissions,20 but if a source is already required to
acquire either a PSD or a Title V permit by virtue of its emissions of another pollutant or pollutants, those
permits must now account for GHG emissions.21

II. the supreme court should not have relied on brown & williamson in analyzing epa's regulatory scheme

The Court relied on Brown & Williamson22to justify this adventure in statutory
reinterpretation. The threshold question in that case was the “appropriate
framework for analyzing” the Food and Drug Administration’s (FDA) decision to
regulate tobacco as a drug under the Food, Drug and Cosmetic Act (FDCA).23 The FDCA defines “drug” to include “articles
(other than food) intended to affect the structure or any function of the
body,”24 a broad definition which seems to include
tobacco.25 The Court nonetheless held that the FDA
lacked authority to regulate tobacco as a “drug” under the FDCA.26 The Court’s decision rested, in part, on
Congress’s decades-long history of regulating tobacco through other legislative
acts—as the Court portrayed it, “an unbroken series of congressional
enactments that made sense only if adopted ‘against the backdrop of the FDA’s
consistent and repeated statements that it lacked authority under the FDCA to
regulate tobacco.’”27

In rejecting the Agency’s interpretation of the term “air
pollutant” in the context of CAA permitting programs, the Court twice cited Brown & Williamson for the
proposition that a statute must be read in the context of “the overall
statutory scheme.”28 The Court
found that EPA’s interpretation of the CAA, insofar as it would require PSD and
Title V permits based solely on GHG emissions, would be incompatible with
Congress’s statutory scheme in enacting the CAA.29

Yet the unique
factual context of Brown & Williamson,
which enabled the Court’s bold statutory reinterpretation in that case, was
totally absent in UARG. In crafting
an interpretation of the FDCA that defeated a plain reading of the statute’s
language, the Court in Brown & Williamson
was able to rely on unusually extensive and consistent subsequent
legislation. No such resource was available in UARG.

III. the court was wrong to replace epa's statutory interpretation with its own

In reviewing the
Tailoring Rule,the UARG Court had four options: (1) force
EPA to follow the CAA’s unworkable numerical limits, thereby putting pressure
on Congress to amend the framework it created; (2) recognize administrative
authority to adjust explicit numerical limits consistent with the Agency’s
interpretation of congressional intent; (3) review the statutory framework and
other indicia of congressional intent and, if appropriate, invalidate EPA’s
approach without establishing a single path forward, leaving it to EPA to propose
an alternative; or (4) conclusively interpret the statute, foreclosing other
potential Agency interpretations. The Court reviewed EPA’s statutory interpretations
under Chevron U.S.A. Inc. v. Natural
Resources Defense Council, Inc.,30 which established a framework that typically
defers to agency interpretations in the face of ambiguity.31 In spite of this deferential framework,
however, the Court took the fourth option—the approach that maximizes the
role of the Court and minimizes the role of the Agency.32 I question whether that was the correct
approach.

First of all, in
striking down the Tailoring Rule, the Court stated that the EPA violated the
separation of powers by revising the CAA’s statutory terms.33 This must mean that the unworkable
consequences of incorporating GHGs into the CAA are for Congress to solve.
After all, it is no more satisfying from a separation-of-powers perspective to
have courts, rather than agencies, determine how to overcome practical
difficulties resulting from a statute’s plain language. From this standpoint,
the fundamental issue is not that the agency tried to fix a statutory problem;
it is that Congress either could not, or would not, fix that problem itself.
But under this analysis, the Court should have approached the absurd results of
GHG regulation by forcing EPA to follow the CAA’s unworkable numerical limits.34

Nonetheless, the
Court seemed to conclude that the absurd results flowing from regulation based
on the statutory language were analogous to statutory ambiguity, and that some
interpretation was therefore appropriate. The question thus became one of
Congressional intent and who should determine that intent.35 What gave the Court the right to substitute
its judgment for that of the EPA?36

There are two
substantive reasons why we should be wary of the Court’s move. First, it is
unclear what justifies the particular interpretation the Court chose. The Court
had multiple options. For example, Justice Breyer argued that narrowing the
meaning of “major emitting facility” was the most sensible approach, given that
it did less violence to the statutory structure.37 Justice Scalia disagreed, and argued that
EPA must instead interpret the term “any air pollutant” to “denote less than
the full range of pollutants covered by the Act-wide definition.”38 There may be still other options that the
Agency and the Justices have not explored. Under Chevron,where statutory
ambiguity exists, the Court’s role is to strike down impermissible statutory
interpretations advanced by agencies, not to interpret congressional intent
itself. In Brown & Williamson,
the Court could at least rely on unusually extensive legislative history in
departing from this well-established rule.39 But in UARG
such a history was missing. Instead, the Court somewhat arbitrarily selected an
interpretation of its own.

Second, even assuming
the Court had some principle behind its interpretation, it is far from clear
that the Court’s interpretation should win out in this case. Determining
Congressional intent in a particular factual setting is not a question of pure
legal analysis. It is a question of applying law to facts, and one for which
understanding the nuances of how an industry functions is particularly
important.40An agency’s greater awareness of the
technical details of a regulation and its consequences ensures that the agency,
as compared to the Court, is in a superior position to understand the
implications of a statutory interpretation in a particular regulatory setting.
This greater awareness supports the view that the agency should make a
determination of legislative intent in the first instance.41

In UARG the Court chastised the EPA for
promulgating a rule that would “bring about an enormous and transformative
expansion in EPA’s regulatory authority without clear congressional
authorization,”42 but nonetheless proceeded to enact an
interpretation with similarly dramatic implications of its own accord and
without clear doctrinal benchmarks. The outcome of UARG may be favorable from the EPA’s perspective, but the Court’s
analysis could lead to difficulties in the future. The Court should not put
itself in the position of interpreting what law Congress would have passed if
it had considered global warming. By doing so in UARG, the Court expanded its authority in a way that is
inconsistent with the system of checks and balances established by the
Constitution.

Matthew
R. Oakes is an attorney in the U.S. Department of Justice, Environment &
Natural Resources Division, Environmental Defense Section. The views expressed
in this Essay are those of the author and are not intended to represent the
views of the United States. The author would like to thank Jack Lipshultz, Eric
Hostetler, Perry Rosen, Kate Konschnik and, in particular, Dave Gunter for
providing excellent and insightful comments.

See 42 US.C. § 7475 (2012) (requiring permits under the CAA prevention of significant deterioration (PSD) program for “major emitting facilities”); 42 U.S.C. § 7479 (2012) (defining “major emitting facilities” as certain types of sources that have potential to emit over 100 tons per year of “any air pollutant,” and mandating that all other stationary sources are subject to PSD permitting if they have potential to emit over 250 tons per year of “any air pollutant”); 42 U.S.C. §§ 7602(j), 7661(2)(B), 7661a(a) (2012) (requiring Title V operating permits for stationary sources that have potential to emit at least 100 tons per year of “any air pollutant”).

SeeUARG, slip op at 9-10 (recognizing that, under the Tailoring Rule, EPA would regulate 83% of stationary source greenhouse gas emissions, and in EPA’s view only 3% of those emissions are brought into the regulatory regime solely due to their greenhouse gas emissions).

Massachusetts v EPA, 549 U.S. 497, 531 (2007) (quoting Brown & Williamson, 529 U.S. at 144). It is notable that it was not exactly legislative history that the Court relied on in Brown & Williamson but rather legislation passed after the relevant statutory language had been promulgated.

It is somewhat surprising that Scalia did not advance this approach See generally American Broadcasting Cos., Inc. v. Aereo, Inc., No. 13-461, slip op. at 13 (U.S. June 25, 2014) (Scalia, J., dissenting) (“Hence, the proper course is not to bend and twist the Act’s terms in an effort to produce a just outcome, but to apply the law as it stands and leave Congress the task of deciding whether the Copyright Act needs an upgrade.. ‘[I]t is not our job to apply laws that have not yet been written.’” (quoting Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417, 456 (1984))).

35

Such ambiguity is sometimes resolved through examining legislative history, but the legislative history is silent with respect to the scope of EPA’s regulatory authority over climate changeSee generally Massachusetts v. E.P.A., 549 U.S. 497, 531 (2007).

36

In this situation the absurd results flowing from regulation based on the statutory language are analogous to statutory ambiguity of a kind that results in agency deference under a traditional Chevron analysis In both cases, some interpretation of Congressional intent is required.